Oil prices have stabilized around $78 per barrel for ICE Brent and $74 per barrel for WTI after Wednesday’s double whammy of bad macroeconomic data. 

The decline in US capital goods spending confirmed fears that economic growth is slowing down in the United States, whilst refinery margins continued their descent this week as downstream players are finding it ever harder to stay profitable. As such, oil is set for its sixth straight monthly loss, despite the OPEC+ production cuts, OilPrice said. 

OPEC Secretary General Haitham al-Ghais warned the International Energy Agency (IEA) to be very careful about discouraging investment into oil and gas, arguing that advocating for such measures and finger-pointing at oil producers will lead to increased volatility in the future. IEA should be ‘very careful’ about undermining key oil investments, OPEC.

Fatih Birol, executive director of the International Energy Agency, has been critical of the OPEC+ group’s surprise announcement earlier this month of production cuts of 1.66 million barrels per day (bpd) from May until the end of 2023. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman had said only two weeks prior to the decision that the group would stick to production cuts it had agreed in October until the end of the year. Oil prices rose above $80 a barrel on the back of the decision, having fallen as low as $70 per barrel last month, Reuters reports.

Brent crude was trading at $78.45 a barrel at 1416 GMT, while U.S. West Texas Intermediate crude was at $75.04. Birol, in an interview with Bloomberg on Wednesday, said OPEC should be careful about pushing oil prices up as that would translate into a weaker global economy.

On Thursday, Al Ghais said blaming oil for inflation was “erroneous and technically incorrect” and that the IEA’s repeated calls to stop investing in oil is what would lead to market volatility. “If anything will lead to future volatility it is the IEA’s repeated calls to stop investing in oil, knowing that all data-driven outlooks envisage the need for more of this precious commodity to fuel global economic growth and prosperity in the decades to come, especially in the developing world.” OPEC+ and the IEA have jousted in recent months over their outlooks for global oil supply and demand, Reuters said.

/OilPrice, Reuters, Bloomberg/